I have an Iwama background, Iwama techniques are very "step wise". I find that this way of learning allows you to better understand the parts of the waza, and gives you time to understand what it is you are doing what you are doing.

However with a step wise practice like this, you can't really feel what we would call the "Aiki" of a situation. You can't see how they pieces fit together in time. So one must have a regular flowing practice.

To me you must also add at least one more step, and have a practice where someone is trying to stop you from applying technique, and is trying to apply technique to you as well. A sparring type practice.

All three of these ways are very important. At my school, we have a Kihon waza class, which is done step wise. Followed by a Ki-no-nagare class which is all done in motion. And at the end of the evening we have an advanced class, where we spar with each other.